Buying car insurance sounds a lot easier when you listen to adverts convincing you to take up cover with insurers with alluring names and scripted benefits. However, buying insurance is a personal process that requires you to consider your specific needs as an individual, weighing them against your budget. Good cover doesn’t come with a blanket approach!
Getting car insurance is simply making sure that you have the appropriate financial backing should anything happen to your car.
These are the five things to consider when buying car insurance:
1. Know what you want before you look for quotes.
Ask yourself what it is that you want from the cover. Study your options for clarification. There are essentially three types of cover to compare when choosing your car insurance.
Third party cover: Should the accident be your fault, this covers you if you damage someone else’s car or injure another person. But it won’t cover damage to your car.
Third party, fire and theft cover: This covers you if your car is stolen or damaged by fire.
Fully comprehensive cover: This is the highest, and slightly more expensive, cover that takes care of most, if not all, your needs when involved in an accident.
2. Excess
Excess is the amount you pay when you claim from insurance. Choosing to pay a higher excess means a lower monthly premium, so assess what excess amount you will be able to fork out unexpectedly when you need to claim.
Head of MiWay Blink, Keletso Mpisane warns, “It is tempting to choose the highest amount so that you can enjoy the lowest premium every month – but the best thing to do is to try and strike a balance that works for you.
A warning sign is that if your premium is super low, it could indicate an alarmingly high excess or other cover limits that you may not be aware of – meaning that you are not comprehensively insured.”
Should your car be stolen or damaged, or worse – should you be involved in a car accident – your insurer will normally pay the garage handling your repair. The excess amount is an uninsured portion of your loss which you pay when you make a claim.
3. Ease of access to the insurer
How easy or difficult is it to interact with the insurer?
“If it’s hard for you at the outset to chat with an insurer, consider it as a red flag. If your insurer has invested in an app or a website that provides you with a seamless and speedy sign-up process, it can be an indication of how stress-free it may be to deal with the insurer in the case of something going wrong,” adds Mpisane.
4. Cost
If it’s the first time you’re getting insurance, your premiums may seem high as you’re considered a high risk. Once you’ve built up a good driving history and record, it will count in your favour.
Some traditional insurers also take factors such as where you park your vehicle most of the time into consideration when determining premiums. However, digitally based insurers such as MiWay Blink employ tech for this, so you don’t need to reveal that information when assessing your monthly premium cost.
5. Cashback possibilities
In this harsh economy, every cent helps, so make sure that the insurer you go with has a cash back option, which means you get a certain amount of money back over time.
“Digital tech makes it possible for you to get cash back according to your driving habits, which is a smart way to save money. With us, the base premium is calculated on a monthly driving distance of 2 500km and, if an insured person drives less than that amount, they qualify for a cashback – which is a refund of part of the premium paid that month.
For example, if someone doesn’t drive at all in a month, a refund of up to 50% of that month’s premium is paid back to them,” concludes Mpisane.
Source: GQ